South Korea’s exports surged the most since 1988 in May as a reopening of overseas economies boosted demand for products manufactured by the Asian nation.
Overseas shipments increased 45.6% from the pandemic-driven plunge a year earlier, the trade ministry said Tuesday, compared with economists’ forecasts for a 48.9% increase. Exports to China rose 22.7% while total semiconductor shipments increased 24.5%.
A separate report from IHS Markit showed the country’s manufacturing sector expanded at a slower pace, with the purchasing managers’ index for May at 53.7, down slightly from the previous month.
While export growth was in part inflated by last year’s 24% drop, the outsized gains reinforce the view that global commerce is recovering from the pandemic and fueling Korea’s economic expansion. Increased vaccinations in major economies like the U.S. have allowed business regulations to be further relaxed and bolstered consumer confidence.
In terms of actual values, exports slowed to $50.7 billion from $51.2 billion in April. The ministry noted there were three fewer working days in May compared with the previous month.
South Korea’s exports are seen as a useful barometer of global demand as the country is home to world-renowned manufacturers for chips, cars and smartphones and the figures are released quickly.